Defendant's Answer to Plaintiffs' Complaint

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IN THE 

UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

RICHARD GORDON HATCHER, 

WILLIE LEE PAGE, 

METRO CORPS OF GARY, INC., 

A Not-For-Profit Corporation 
and others similarly situated, 

Plaintiffs 

VS. CIVIL ACTION NO. H 77-154 

METHODIST HOSPITAL OF GARY, INC., 

An Indiana Not-For-Profit 
Corporation and DENIS E. RIBORDY, 
as President of the Board of 
Directors, 

JOSEPH CALIFANO, as United States 

Secretary of Health, Education 
and Welfare, 

WILLIAM T. PAYNTER, M.D., as 

State Health Commissioner for the 
Indiana State Board of Health, 

DAVID J. EDWARDS, M.D., as 

Director of the Health Facilities, 
Services and Review Development 
Bureau of the Indiana State Board 
of Health, and 

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Defendants 

DEFENDANTS ' , METHODIST HOSPITAL OF GARY, INC. AND 
DENIS hb. RIBORDY , ANSWER TO PLAINTIFFS COMPLAINT 
  

  

Come now the defendants, Methodist Hospital of Gary, 

Inc. and Denis E. Ribordy, and for their answer to plaintiffs’ 

Complaint allege and say: 

1. Defendants deny each and every allegation of rhetorical 

paragraph 1 of Paragraph I of plaintiffs' Complaint. 

 



  

2. Defendants deny each and every allegation of shetoricoal 

paragraph 2 of Paragraph II of the plaintiffs’ Complaint. 

3. Defendants deny each and every allegation of rhetorical 

paragraph 3 of Paragraph III of the plaintiffs' Complaint. 

4. Defendants admit that plaintiff, Richard Gordon 

Hatcher, is a Black and a resident of Gary and is currently 

the Mayor of the City of Gary. Defendants have no knowledge 

sufficient to form a belief as to the truth of the allegations 

that it is likely he will require use of health facilities 

in the future and that as the Chief Executive of Gary, plaintiff 

Hatcher is responsible inter alia for assuring that the 
  

social service and health needs of his constituency including 

sethbers of the plaintiff class are met. Defendant denies 

each and every remaining allegation of rhetorical paragraph 

4 of Paragraph IV of the plaintiffs' Complaint. 

5. Defendants admit that Willie Lee Page is a 66 year 

old Black resident of Gary who has used the facilities of 

Gary Methodist Hospital. Defendants have no knowledge sufficient 

to form a belief as to the truth of the allegations that 

she has required and does require hospital treatment and 

it is likely that she will require the use of hospital facilities 

in the future. Defendants deny each and every remaining 

allegation of rhetorical paragraph 5 of Paragraph IV of 

the plaintiffs' Complaint. 

6. Defendants are without knowledge sufficient to 

form a belief as to the truth of the allegations that plaintiff, 

Metro Corps of Gary, Inc., is a not-for-profit organization, 

organized for the purposes of providing services for and 

helping meet the needs of the elderly, poor, handicapped 

 



  

and sick residents of Gary; that the constituency of the 

Plaintiff, Metro Corps of Gary, IncC., includes the minority 

and handicapped residents of Gary who directly elect persons 

as their representatives to the Board of Directors of Metro 

Corps.of Gary, Inc.; that members of the Board of Directors 

represent organizations whose members include elderly, handicapped 

and minority residents of Gary; that among the programs 

which Metro Corps of Gary, Inc. operates are Telecare and 

Escort Services; that Telecare is a program to contact senior 

citizens and handicapped persons to assure that their health 

needs are being met; that plaintiff Page and members of 

the plaintiff class are included in the elderly, poor, handicapped 

and sick residents of Gary or that the senior citizens and 

handicapped persons include members of the plaintiff class; 

that Escort Services provides transportation and assistance 

without charge to the poor, elderly, handicapped, minority 

and sick persons of Gary, including members of the plaintiff 

class who require and/or are unable otherwise to obtain 

transportation to health facilities; that since the opening 

of Broadway Methodist Hospital, Escort Services has provided 

transportation service to that facility for persons who 

require treatment at Broadway Methodist Hospital that is 

unavailable at Gary Methodist Hospital. Defendants deny 

each and every other remaining allegation of rhetorical 

paragraph 6 of Paragraph IV of the plaintiffs' Complaint. 

7. Plaintiffs admit that defendant, Methodist Hospital 

of Gary, Inc., is a not-for-profit organization, organized 

under the laws of the State of Indiana which currently operates 

a 365-bed facility in the City of Gary, and a 165-bed facility 

 



  

in Merrillville, a suburb of Gary; that Methodist Hospital 

of Gary, Inc. is a recipient of federal funds under the 

Hill-Burton Act and the Medicare and Medicaid programs and 

other federal programs; that Methodist Hospital has received 

more than three million dollars in direct construction grants 

and more than eight million dollars in loan guarantees with 

interest subsidies under the Hill-Burton program including 

a grant and loan guarantee for construction of Broadway 

Methodist; and that defendant, Denis E. Ribordy, was President 

of the Board of Directors of Methodist Hospital until January, 

1978. Defendant denies each and every remaining allegation of 

rhetorical paragraph 7 of Paragraph IV of the plaintiffs’ 

Complaint. 

8. Defendants are without knowledge sufficient to 

admit or deny the allegations contained in rhetorical paragraph 

8 of Paragraph V of the plaintiffs' Complaint. 

9. Defendants are without knowledge sufficient to 

admit or deny the allegations contained in rhetorical paragraph 

9 of Paragraph V of the plaintiffs' Complaint. | 

10. Defendants admit the allegations contained in rhetorical 

paragraph 10 of Paragraph V of the plaintiffs' Complaint. 

ll. Defendants admit the allegations contained in rhetorical 

paragraph 11 of Paragraph VI of the plaintiffs' Complaint. 

12. Defendants admit the allegations contained in rhetorical 

paragraph 12 of Paragraph VI of the plaintiffs' Complaint, 

with the exceptions that the defendants deny that the commitment 

was made in the early 1970's. 

13. Defendants admit that the Merrillville Hospital 

is named Broadway Methodist Hospital, cost approximately 

 



  

$18 million, was completed in December, 1975, and is a 

165-bed acute care general hospital. Defendants deny the 

remaining allegations contained in rhetorical paragraph 

13 of Paragraph VI of the plaintiffs' Complaint. 

14. Defendants admit that Broadway Methodist Hospital 

is located in Merrillville, Lake County, Indiana, south 

of the Gary Methodist Hospital. Defendants deny that it 

is fifteen (15) miles south. Defendants have no knowledge 

sufficient to form a belief As to the truth of the remaining 

allegations of rhetorical paragraph 14 of Paragraph VI of 

the plaintiffs' Complaint. 

15. Defendants deny the allegations contained in rhetorical 

paragraph 15 of Paragraph VI of the plaintiffs' Complaint. 

16. Defendants deny each and every allegation contained 

in rhetorical paragraph 16 of Paragraph VI of the plaintiffs! 

Complaint. 

17. Defendants admit that Methodist Hospital of Gary 

constructed Broadway Methodist Hospital with the Hill-Burton 

grant of one million, one hundred and fifty-two thousand 

five hundred dollars ($1,152,500.00) and a Hill-Burton guarantee 

on a loan for fourteen million, three hundred and thirty- 

six thousand one hundred ninety-three dollars and 12/100 

“4814,336,193.12). ‘Defendants have no knowledge sufficient 

to form a belief as to the truth of the remaining allegations 

of yhetor teal paragraph 17 of Paragraph VI of the plaintiffs’ 

Complaint. 

18. Defendants have no knowledge sufficient to form 

a belief as to the truth of the allegations of rhetorical 

paragraph 18 of Paragraph VI of the plaintiffs' Complaint. 

 



  

19. Defendants admit the allegations contained in rhetorical 

paragraph 19 of Paragraph VI of the plaintiffs' Complaint. 

20. Defendants admit that the HSA recommended to the 

State agency that it recommend to HEW approval of the plan 

and the Hill-Burton application. Defendants have no knowledge 

sufficient to form a belief as to the truth of the remaining 

allegations of rhetorical paragraph 20 of Paragraph VI of 

the plaintiffs' Complaint. 

21. Defendants admit that thereafter the State agency 

recommended to the secretary of HEW that he approve Methodist 

Hospital of Gary, Inc.'s plan and Hill-Burton application. 

Defendants have no knowledge sufficient to form a belief 

as to the truth of the remaining allegations of rhetorical 

paragraph 21 of Paragraph VI of the plaintiffs' Complaint. 

22. Defendants have no knowledge sufficient to form 

a belief as to the truth of the allegations contained in 

rhetorical paragraph 22 of Paragraph VI of the plaintiffs’ 

Complaint. 

23. Defendants admit that HEW gave Civil Rights clearance 

to the 1976 proposal and approval to the grant of the Hill- 

Burton application. Defendants deny each and every remaining 

allegation of rhetorical paragraph 23 of Paragraph VI of 

the plaintiffs’ Complaint. 

24. Defendants deny each and every allegation of rhetorical 

paragraph 24 of Paragraph VI of the plaintiffs' Complaint. 

25. Defendants deny each and every allegation of rhetorical 

paragraph 25 of Paragraph VII of the plaintiffs' Complaint. 

26. Defendants deny each and every allegation of rhetorical 

paragraph 26 of Paragraph VII of the plaintiffs' Complaint. 

 



  

27. Defendants deny each and every allegation of rhetorical 

paragraph 27 of Paragraph VII of the plaintiffs' Complaint. 

28. Defendants deny each and every allegation of rhetorical 

paragraph 28 of Paragraph VII of the plaintiffs' Complaint. 

29. That as to any allegation made by the plaintiffs 

in any rhetorical paragraph not heretofore admitted, denied 

or otherwise addressed, the same is now specifically denied. 

30. That the action brought by the plaintiffs is frivolous 

and without merit. 

AFFIRMATIVE DEFENSES 
  

I. This Court lacks jurisdiction of the subject matter 

of this Complaint for the following reasons: 

l. The Administrative Procedures Act, 5 U.S.C. 

$101, et seq. , precludes judicial intervention into HEW's 

§1122 approval of defendant's Hill-Burton loan guarantee 

and interest subsidy application. 

2. The plaintiffs’ Complaint fails to disclose 

the existence of a case and controversy as is required for 

a constitutional exercise of jurisdiction since (a) plaintiffs 

herein lack standing to bring this suit in that they have 

not alleged an injury in fact and the individual plaintiffs’ 

alleged injuries by granting the relief requested and (b) 

this matter is not ripe for judicial review since a final 

administrative decision has not been made regarding certain 

civil rights complaints lodged against Methodist Hospital 

concerning the subject matter of this suit and therefore 

the controversy has not reached a sufficiently concrete 

stage and is too speculative to warrant judicial consideration. 

 



  

3. The Complaint fails to disclose the existence 

of an "actual controversy" which is a further limitation 

on suits brought under the Declaratory Judgment Act, 28 

U.S.C. §2201 et seq... 

4. The actions taken by Methodist Hospital are 

not "State actions" under the Civil Rights Act of 1871, 

42 U.S.C. $1983 (51983) or the "State actions" to which 

the Fourteenth Amendment applies. 

5. No private right of action exists under Section 

504 of the Rehabilitation Act of 1973, 29 U.S.C. §794 (5504) 

and, therefore, this Court has no jurisdiction to hear those 

aspects of the case dealing with alleged discrimination 

under that Act. Even assuming that a cause of action exists 

under Section 504, this Court nevertheless, should refrain 

from considering issues raised under Section 504 since the 

primary jurisdiction and obligation to enforce obligations 

under Section 504 are vested in HEW under 45 C.F.R. §84.4(b) (5). 

6. That no private right of action exists under 

Title VI of the Civil Rights Act of 1964 against a private 

institution such as Methodist Hospital or against an individual 

such as Denis E. Ribordy. 

7. Plaintiffs have failed to exhaust the administrative 

remedies available to them under 45 C.F.R. §80.0 et seq., 

for Complaints under Title VI of the Civil Rights Act of 

3964, 42 °U.5.C. §20004, et segq., (Title VI) in Section 504. 

Under this regulation, any person who believes he has been 

the subject of discrimination in a program receiving | 

financial assistance through the Department of Health, Education 

and Welfare may avail himself of the remedy provided in 

45 C.F.R. §80.7. Although plaintiffs have a well-established 

and available administrative remedy to redress their alleged 

injuries attributable to Methodist Hospital with regard 

to rights established and guaranteed under Title VI and Section 

Bn 

 



  

504, plaintiffs have failed to utilize and exhaust such 

remedies. Furthermore, plaintiffs have failed to avail 

themselves of the remedy prescribed pursuant to I.C. §22- 

9-1-1 (The Indiana Civil Rights Act) or the Regulations 

promulgated thereunder or the procedures applicable SRE ahs 

under I.C. §4-22-1-1 et seq. (The Indiana Administrative 

Procedural Act), and have thereby failed to exhaust adminis-— 

trative remedies. 

II. Plaintiffs have failed to state a claim upon which 

relief can be granted for the following reasons: 

l. The Hill-Burton Act, 42 U.S.C. §291 et seq. , 

which sets out the various provisions governing the loan 

gurantee, exempts loan guarantee programs from its coverage 

and provides that the program, such as the one in question 

in this suit, is incontestable except for cases involving 

fraud and misrepresentation. No such allegations have been 

made in the plaintiffs' Complaint. 

2. Section 1122 of the Social Security Act, as 

amended in 1972, 42 uy.S.C. $1320 a-l is in no way applicable 

to Methodist Hospital since plaintiffs have not nor could 

allege a factual situation, short of fraud or criminal collusion, 

which would state a cause of action against Methodist Hospital 

under Section 1122. 

3. Plaintiffs' allegations in this Complaint 

fail to state a cause of action under Section 504 in that 

there is a allegation of disparate impact on the handicapped 

residents of Gary. 

4. Plaintiffs have not alleged facts sufficient 

to show a violation of 42 U.S.C. §1983 in that it has not 

 



  

IT1. Plaintiffs are guilty of laches in that they seek 

ro reverse certain administrative decisions which were made, 

with full knowledge of a number of the plaintiffs, more 

than four years prior to the institution of this action. 

These plaintiffs, who knew exactly what administrative deter- 

minations were being made, did not complain about the alleged 

deprivation of their rights until some four veaps later, 

until after Methodist Hospital had expended huge sums of 

money in reliance upon those administrative decisions. 

IV. Plaintiffs have failed to join an indispensible 

party, as is required under the Federal Rules of Civil Procedure, 

Rule 19, in that the broad relief requested by plaintiffs 

would effect all health care providers in this State and 

not just Methodist Hospital. | 

V. Plaintiffs have failed to demonstrate that they 

are entitled to the equitable relief sought in their Complaint. 

By their actions, plaintiffs have demonstrated that they 

are not entitled to such relief. 

VI. Plaintiffs have failed to state any cause of action 

against the defendant, Denis E. Ribordy. 

WHEREFORE, defendants pray that plaintiffs' Complaint 

be dismissed and that defendants have judgment for reasonable 

attorney's fees and their costs in this action. 

HODGES, DAVIS, GRUENBERG, COMPTON & SAYERS 
ATTORNEYS FOR DEFENDANTS, METHODIST HOSPITAL 
OF GARY, INC. AND DENIS E. RIBORDY 

(] 
BY: GC hy ris , lL (dll - 

~EWARD rb HUSSEY vgs ai 
5525 Broadway ( 
Gary, Indiana 46410 
Ph. 981-2557 

  

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